I recently stumbled into something that I honestly never thought much about before: estate taxes. What got my attention was how this has ruined so many Filipino families and yet it is something that’s still an uncommon point of discussion.
It’s tragic because a lot of families have been torn apart simply because the estate owner (usually the parents) have not given this any attention, and left it all for their children to figure out — which is the main source of conflict.
We work so hard to build a future for our families—buying property, building businesses, saving and investing—but barely anyone talks about what happens to all of that when we’re gone.
So I did a deep dive, talked to people who actually handle this stuff, and put together this simplified guide. I hope this helps more Filipinos understand the importance of estate planning and why this isn’t something you should ignore.
Estate tax is the fee the government charges before your heirs can inherit what you’ve left behind. It applies to everything with value: properties, businesses, investments, savings, vehicles—basically, everything you’ve worked hard for your entire life.
In the Philippines, the estate tax is a flat 6% of the total net value of your estate, as mandated by the TRAIN law.
Let’s put this into perspective with real numbers.
If you’ve built up an estate worth ₱20 million—maybe a house, a few properties, business shares, and some savings—here’s what your family is looking at:
₱20,000,000 × 6% = ₱1,200,000
That’s ₱1.2 million in estate taxes, and it needs to be paid in cash within one year of your passing.
Now, here’s the part that catches most people off guard: your heirs can’t use the estate itself to pay for that tax. Meaning, they can’t just “take it from the property” or sell a portion of the land on paper—they need to have actual cash ready.
So unless your heirs already have that kind of money available, they’ll be forced to:
And all of this is happening while they’re also trying to deal with the grief of losing you.
It’s stressful, avoidable, and totally preventable—with proper planning.
A lot of Filipinos think they can avoid estate tax by donating their properties to their children while they’re still alive, or by selling it to them at a friendly price. While that sounds smart in theory, it doesn’t really solve the problem. Both donation and sale of property are still subject to taxes—a combined rate of 7.5% (6% tax plus 1.5% documentary stamp tax), which is actually more expensive than the estate tax itself.
On top of that, once you donate or sell the property, you lose control over it entirely. That means if something goes wrong—like family disagreements or financial mismanagement—you no longer have any legal hold on what you spent your life working for.
What seems like a shortcut can end up costing more in the long run, both financially and emotionally.
The law gives your heirs one year to settle the tax with the BIR. Yes, there are cases where the deadline can be extended or paid in installments, but those are limited and not guaranteed.
If your family misses the deadline, they’ll face:
It’s a logistical and emotional nightmare—and one that’s entirely preventable.
Your family should inherit your legacy—not your tax problems.
Instead of scrambling to raise millions in cash after you're gone, there’s a better way: prepare now so your family won’t have to worry later.
By preparing ahead of time, you avoid these problems. You make sure your loved ones aren’t left with a financial mess. You protect your relationships, your estate, and your legacy.
Creating a proper estate plan ensures that your family won’t have to argue about who pays what. They won’t be left guessing. And most importantly, they won’t be burdened by a financial problem on top of an emotional one.
With a proper estate plan in place, you heirs won’t have to stress about raising cash. There’s a way to make sure there will be cash available when the time comes.
This won’t even cost as much because you can prepare for this gradually, with payments spread out.
The best part? Your assets will still be under your name. You won’t need to donate or sell your properties during your lifetime which gives you full control.
Honestly, I used to think that too.
But here’s the truth: if you own land, a house, a business, or any kind of valuable asset—this matters to you. Especially if your estate is valued at ₱20 million or more.
Estate planning is simply making sure your loved ones don’t suffer the consequences of poor preparation.
It helps:
After learning all of this, I knew I had to do something about it—not just for myself, but for others too.
That’s why I’ve started working with Paradyme, a company that helps Filipinos create proper estate plans. They specialize in making this process easier and more accessible, even if you’re just starting to think about your finances more seriously.
If you’ve built something you want to pass on—don’t wait. Start planning now.
Because your family should inherit your legacy, not your tax problems.
